Published on: September 29, 2024, 06:38h.
Last updated on: September 29, 2024, 06:38h.
Casino resorts located in the United Arab Emirates (UAE) have the potential to generate annual gross gaming revenue (GGR) ranging from $3 billion to $5 billion, which could rival Singapore, according to recent estimates from Morgan Stanley.
The bank did not specify the number of gaming venues required to reach the $5 billion mark. While casino gaming has not been officially approved by UAE regulators, Wynn Resorts (NASDAQ: WYNN) recently initiated the construction of its Wynn Al Marjan Island integrated resort in Ras Al Khaimah (RAK). This property is anticipated to be the first regulated casino hotel in the Arab world. Additionally, MGM Resorts International (NYSE: MGM) has expressed plans to pursue a gaming license in Abu Dhabi.
Morgan Stanley analysts observed, “We benchmark RAK and its closest large international airport/city Dubai to Singapore. Bottom-line, RAK/Dubai appear to offer similar demand drivers to Singapore, which could point to outsized return on invested capital.”
Furthermore, the analysts highlighted that Dubai/RAK possess certain advantages over Singapore, such as a larger population, higher tourism levels, and a more extensive collection of five-star hotels.
Opportunities for UAE in the Casino Market
The $3 billion to $5 billion GGR projection by Morgan Stanley is feasible. Previous estimates from other research firms suggested that Wynn Al Marjan Island, scheduled to open in early 2027, could achieve $1.4 billion in yearly GGR once fully operational.
This indicates that the Wynn property alone could contribute nearly half of the $3 billion target. To surpass this figure, factors such as contributions from MGM’s casino, the total number of gaming venues allowed in UAE, and the inclusion of locals in wagering activities will play a crucial role.
Morgan Stanley hinted that as the gaming regulatory process progresses, UAE may approve more integrated resorts compared to those in Singapore. However, the exact count of gaming venues that will eventually exist in the emirates remains unknown. In a statement last year, MGM CEO Bill Hornbuckle suggested that this number could potentially reach four in the long run.
Morgan Stanley also indicated that a majority of international visitors to UAE casinos are likely to originate from Europe and Southern Asia.
Comparing UAE Casinos to Singapore
The ability of UAE casinos to attract locals to participate in betting activities could determine their GGR potential. Despite having fewer millionaires compared to Singapore, the UAE possesses vast oil wealth, and the growth rate of ultra-high net worth individuals in the emirates has exceeded that of Singapore in recent times, as highlighted by Morgan Stanley.
The analysts also remarked that UAE casinos are unlikely to harm rival properties in other regions, citing the simultaneous debut of two integrated resorts in Singapore as an example.
“Historically, we have seen limited impact of new gaming markets cannibalising existing ones. For example, Singapore opened two of its casinos in 2010 — with 2011 GGR of US$6 billion — but Macau still saw a US$9.9 billion increase (+42 percent year-on-year) in its GGR in 2011,” wrote the analysts.